In my 35-plus years in the food service industry, I can say that I’ve been there, seen this and done that.
I had worked through coup d’états, major calamities, financial crisis, swine and bird flu, SARS, and many other sorts of crisis. During those times, restaurants and food chains suffered but almost all would recover in just a few months.
Now six months into the COVID-19 crisis, it is very clear that even if we combine the negative impact of all the past crises, their sum will pale in comparison to what the COVID-19 pandemic has done to the industry.
Since rejoining Shakey’s in 2003, I’ve been focusing on turning things around and bringing the brand back to the top of the heap. As a former Shakey’s store crew growing all the way to the top, I have been blessed in my career and I feel grateful to the industry and the companies I worked with. This made me yearn to pay it forward and want to see others grow and benefit from this industry. It has become a personal mission.
Helping companies achieve healthy and sustainable growth is the key because it creates a positive impact to all stakeholders especially to employees who are the core of the business. Seeing an employee grow with the company always provides me a great sense of satisfaction and a very rewarding feeling. Truth be told, the feeling is quite addictive.
With my experiences in helping companies grow, it is easy to become confident and feel like no problem is unbeatable. I find problem solving exciting, even fun. I get fired up with big challenges because I see them as opportunities to exceed expectations. What you need are the right attitude, correct problem analysis, good planning, team buy in, and good execution.
“ Overnight, our grandiose 2020 plans became irrelevant, forcing us to reorganize, implement drastic adjustments, and make some really painful rightsizing decisions. ”
However, in the first two weeks of this pandemic, this sense of confidence and bravado vanished. I suddenly found myself admitting that I didn’t know what to do. I was in unchartered territory, too many unknowns and everything in the extreme state of flux. The only consolation for me is that I know everyone in the industry feels the same way.
Since 2003, the Shakey’s team has done a superb job in turning around the company and bringing Shakey’s back to a strong leadership position. In 2019, our company posted an unprecedented 16 consecutive years of double-digit growth in sales and profits. We started 2020 very strong and as late as mid-March of this year, sales were exceeding all targets that I was confident a 17th consecutive year record for the industry was in the bag. That was until March 16.
The imposition of the very strict quarantine rules last March 16 came like a knockout blow to the industry. The phrase “cash is king” changed from just a cliché into every company’s main survival strategy. For Shakey’s, the priority shifted from extending the growth run to save cash and survive this year. Overnight, our grandiose 2020 plans became irrelevant, forcing us to reorganize, implement drastic adjustments, and make some really painful rightsizing decisions.
The first priority was to ensure the safety of all our guests and employees, so we had to close the majority of our stores to minimize health risks. We moved quickly to create new safety and operating protocols and only when we were confident we had the right systems in place did we reopen our closed stores. Shakey’s was among the first to shut down and we closed as much as 95 percent within March. But, by the first week of April, we already had one of the highest ratios of opened stores. Our team’s very agile mindset, strong culture, solid management support, and the high level of trust throughout the organization enabled us to rebound faster than others and much better than expected.
Shakey’s has now shifted from firefighting mode to executing medium- and long-term strategies. In the middle of this crisis, we have opened new Peri-Peri branches, Shakey’s cloud kitchens and a few more coming before year end. Soon in select stores, we will serve high-quality milk tea beverages of our newly acquired R&B Milk Tea brand from Singapore. Other initiatives like Park-n-Order, al fresco dining, high-value promos are well on their way. I believe the strategic adjustments we implemented are working and that we have regained our bearings.
“ Whether your company is big or small, new or long-time brand, local or foreign, you suffer the same fate if you fail to adapt to the new normal correctly and swiftly. ”
We are so glad we made the right investment in our delivery business and digital transformation programs way before COVID-19. Our partnerships with food aggregators that started early last year has been healthy. Our multiple revenue channels, above industry margins, well distributed stores, high brand trust and love, and our core product, pizzas — the quintessential take home and delivery product — have provided Shakey’s several unique advantages crucial in properly navigating this crisis. I am confident Shakey’s will not only survive this pandemic but will also be in a good position to take advantage of the opportunities that will come in the aftermath.
Knock on wood, our sales are trending in the right direction and recovery rates are moving up, but we are not out of the woods yet. Obviously, an awful lot more work needs to be done. This crisis will not end anytime soon, and this could get worse before it gets better. Clearly, COVID-19 has dramatically changed the whole industry and so our business paradigms and models must change and adapt to the new normal. There already have been many closures and, unless companies find ways to reinvent their businesses, many more will follow.
For the food service industry, we could sum up the COVID-19’s impact in three ways. First, this is a “wake-up call” for the industry. It showed us that this business is not as easy as what many originally thought. Before COVID-19, many wanted to invest in the business, today many are seeking to divest. It would be foolhardy to go in now. Second, it is a “great equalizer.” Whether your company is big or small, new or long-time brand, local or foreign, you suffer the same fate if you fail to adapt to the new normal correctly and swiftly. Lastly, I see this crisis as an “industry reset button.” The industry’s low entry barrier and the lure of fast return have made the supply ridiculously outpacing demand. This crisis will result in a reset and a correction of this long-running oversupply dilemma.
Like I said, I’ve been in this business for 35-plus years and I always thought that I’ve been there, seen this and done that. This crisis showed me I was terribly wrong. COVID-19 brought me back to “terra firma” and definitely taught me a lot of new things. Fact is, I am now grateful for this crisis for the learnings and for providing me and the Shakey’s team a new and unique opportunity to WOW! When the smoke of this pandemic finally clears, I know I’ll come out wiser, better and much stronger… so will Shakey’s.
Stay safe, my friends!
Edited by Büm Tenorio Jr.